The Glade 4.0

You need to get out more. It's not even a "conservative position" per se, but a basic common sense economics position.

The massive inflation through the 60's to the 80's was a result of the available workforce effectively doubling overnight, massively tilting the supply and demand equation for labor in favor of the employer. Before women joined the workforce en masse, a person could support a large family on the salary of a general laborer, complete with home ownership. Now it takes two people struggling to make ends meet even in most skilled jobs. I'm certainly not saying we should get back in the kitchen. I'm saying one parent in every family (sex irrelevant) SHOULD stay home. It's better for the kids, it's better for the economy, it's better for quality of life. And right now, it's nearly impossible.

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Well Ali Baba had them forty thieves, Scheherezade had a thousand tales
But master you in luck 'cause up your sleeves you got a brand of magic never fails...
...Mister Aladdin, sir, What will your pleasure be?
Let me take your order, Jot it down -You ain't never had a friend like me
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The only reasoning I could come up with behind that claim was that X was misinterpreting the statement that families should live within their means to such a degree that they can afford to live off of one income if the need should arise, not to be completely dependent on the second income. Such a determination includes things such as house, car, living expenses and in most cases, the size of the family.

However, that would be a fiscally conservative position, and he phrased his comment in a manner that would seem to be a misunderstanding of a socially conservative position. I don't know.

Holy **** ...

Someone's been paying attention.

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I don't believe you, since among others Warren Buffet has come out and said essentially exactly that.

Except, it's still not true. You realize that Bill Gates and Warren Buffet both exist largely on paper right? That their actual cash incomes are so far below the rate of growth in their intangible holdings that its disingenuous to call either a billionaire? Neither of them has ever had that much cash on hand; nor, for that matter, has either of them ever had that much value in tangible assets with secured values.

I realize everyone likes to say the rich get away with paying lower taxes at lower effective rates, but its simply not true.

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So your saying that because most of their wealth is in investments, earning more money, that they don't actually count as being wealthy?

Interesting position but it's a bit of chicken versus egg isn't it? The jobs existed to be filled, they weren't spun out of nothing as a means to bleed money out of corporations.

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Let's see:

This one:



Then this one:



Then finally this one:



Then, following those posts, and after you understood me, you told me I should clarify.

What's the deal, man? I mean, yeah, it's my responsibility to clarify my statements, but could you at least try, or are you just trying to waste time?

Income from investments is taxed before the investor ever makes a profit. If you count capital gains and dividents, for instance, as "income," then you must count taxes paid by the companies they invested in as taxes paid.

Let me put it another way:

I own stock in ABC company worth $1000.

ABC company makes $1,000,000, and pays $500,000 in taxes as a result.

With its post tax profit of $500,000 affecting investor confidence, ABC company shares trade at $1200. I sell my stock and have now made a capital gain of $200. However, had ABC Company not been forced to pay tax, my investment would be worth $1400 and my capital gain would be $400. The taxes the company pays are passed down to their investors -- even existing capital gains and dividend taxes represent double-taxation.

_________________
Well Ali Baba had them forty thieves, Scheherezade had a thousand tales
But master you in luck 'cause up your sleeves you got a brand of magic never fails...
...Mister Aladdin, sir, What will your pleasure be?
Let me take your order, Jot it down -You ain't never had a friend like me
█ ♣ █

Actually, companies found ways to employ this new supply of cheap labor. With the new funds added to the coffers of every family, prices started to rise, for everything. Also, a new labor market arose for "day care," as families no longer had parents available to look after children. (As anyone who has had to find babysitting/daycare for children knows, it eats up about double the minimum wage as an average to put a child into daycare.) Actual financial benefits to families for having two incomes over previous economic model? Zero.

_________________
Well Ali Baba had them forty thieves, Scheherezade had a thousand tales
But master you in luck 'cause up your sleeves you got a brand of magic never fails...
...Mister Aladdin, sir, What will your pleasure be?
Let me take your order, Jot it down -You ain't never had a friend like me
█ ♣ █

The rich pay far, far higher income taxes than most Americans. There are no real loopholes here. The issue is when you're talking about the super-wealthy, most of their wealth does not come from "income," it comes from capital gains, which are taxed at only 15%. If you count the hidden costs the employer passes on, poor and middle class Americans pay more than this in payroll taxes on every dollar they earn, let alone income taxes.

Of course, if the wealthy ever wanted to actually spend their billions of dollars that they've made on the stock market, they would have to sell their shares and pay income taxes on all of that money. That's why none of them ever do it. Why do you think Bill Gates and Buffett gave 85% of their fortune to charity and put the vast majority of the rest into a variety of trusts? It's because these things are tax free, letting them avoid the 40% income tax.

It's only "double-taxation" on the investor if you ignore the corporation's separate legal status, and of course, investors only want to do that when the subject is corporate profits and taxes, not when the subject is corporate losses and liabilities. Sorry folks, but you can't take the upside without taking the downside (well, unless you have an LLC or S-Corp! *grin*).

Captain Gains has fluctuated between a temporary 15% to as high as the highest marginal over the last decade. Short term investments are taxed at the highest applicable marginal as in year income. And there's also the alternative minimum tax which subjects all of your capital gains income to various adjustments on your payroll income tax.

So, I'm failing to see how you guys think these loopholes exist. Maybe you want to close the AMT gap, in which case everyone who makes more than about $100,000 would pay highest marginal at 100% of their income?

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Honestly, I think family size is what it comes down to. Two people working simply can't be less productive than one person working, that's totally illogical. However, in 1950, when a family had six kids, no one could claim that the wife staying at home wasn't working. Today, that same woman has a job, but only has one or two kids. The actual amount of work done per family hasn't really increased or decreased, so it doesn't make sense that they should make more money.

The issue is, if households go back to one income, they aren't likely to also adopt 1950s attitudes about family size. So the actual amount of work done will decrease, and so will income.

Also, I'd like to ask Khross: You said that according to my figure, 3% of all Americans are responsible for 45% of all government revenues, and implied that this was grossly unfair.

My question is, if we were to eliminate payroll taxes, and simply implement a flat income tax, (we don't even need to bother with a capital gains tax, since the money will eventually be recorded as income somewhere, sometime) don't you think this inequality would increase substantially? That 3% would suddenly be paying a much higher portion of total federal revenues. How can you be for a flat tax yet claim that this inequality is unfair?

Ah ha ...

My flat tax would come in the form of a consumption tax. You'd pay X% of what you spent. And, well, that'd be that.

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A consumption tax is great on paper, but artificially taxes the lower income brackets heavily. Additionally, it would make government impossible to budget, as it would/could wildly fluctuate. I think a flat income tax combined with property taxes would be the better way to go, it's more static and less subject to the whims of buyers.

I'm not a huge fan of consumption taxes either, with the exception of certain obvious luxury items. I'm okay with taxing alcohol, tobacco, etc. Other sales taxes I disapprove of, in general.

_________________
Well Ali Baba had them forty thieves, Scheherezade had a thousand tales
But master you in luck 'cause up your sleeves you got a brand of magic never fails...
...Mister Aladdin, sir, What will your pleasure be?
Let me take your order, Jot it down -You ain't never had a friend like me
█ ♣ █

It does no such thing. People who lake less money spend less money. It actually shifts the burden of taxation upward but at a reasonable measure. As for making it impossible for the government to budget its expenditures, perhaps the government should operate like a sane business in the first place. All fixed costs should be paid for by free-capital secured a minimum of a year prior to the budgeting period.

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Nothing you have suggested, nor currently in practice, is any less of a in issue with planning federal budget planning. See the current recession for a good example of government spending to the "best" income levels while collecting far less because the *** they pinned their tail to died on the path.

That's true, but the relationship between the two is not linear. Wealthy people consume a smaller percentage of their income than poor people, it's one of the main reasons why they're wealthy. I'm not sure what you're referring to when you say it would shift the burden of taxation upward. Relative to what? To our current tax model? Certainly not, it would shift the burden down.

It really wouldn't, else every state in the country with a sales tax and every city in the country with a sales tax is already unduly hindering the poor who should be flocking to some place like Florida?

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Hey, Xeq, if you're really interested in ensuring consumption taxes are fair, make sure they are also applied to purchases of investments. If you paid your consumption tax on purchases of stocks & bonds (they'd already apply to commodities on general principle), then the money would be taxed as it was invested.

I'm not saying I'm a fan of that (in fact, it might be disastrous, though it has a few benefits). Just, a consumption tax can logically be carried forward in a way that also hits those who don't spend as much of their income -- Stocks and Bonds are just purchases of goods, like everything else.

_________________
Well Ali Baba had them forty thieves, Scheherezade had a thousand tales
But master you in luck 'cause up your sleeves you got a brand of magic never fails...
...Mister Aladdin, sir, What will your pleasure be?
Let me take your order, Jot it down -You ain't never had a friend like me
█ ♣ █

Sure they spend less, but they also have much less disposable income.

If you say institute a 15% flat consumption tax, you've just added an 8.5% increase on the tax burden for someone who's poor and living paycheck to paycheck and unable to save/invest any of their income. Someone who is better off and able to invest, will be putting a chunk of their money away instead of spending it, which in effect will increase their income more so that the impact of a consumption tax is even less.

I might be swayed by a consumption tax that only applied to non-essential goods, but defining what a non-essential good is a tricky business and ends up being more trouble than it's worth.

I'd prefer to see a straight up income tax, that was a flat percentage, no deductions that kicked in above a certain minimum income level. That strikes me as the easiest to manage and legislate.

Essential items are typically not taxed (food, clothing).